Middle East Situation Impacts Japanese Auto Industry: Some Manufacturers Cut Production, Tire Prices Rise
The tightening situation in the Middle East, particularly the effective blockade of the Strait of Hormuz, is impacting Japan's automotive industry, leading to naphtha shortages, production cuts by some manufacturers, and rising tire prices. The instability in diluent supply is particularly severe, affecting repair shops and truck manufacturers.
📋 Article Processing Timeline
- 📰 Published: May 8, 2026 at 13:55
- 🔍 Collected: May 8, 2026 at 14:01 (5 min after Published)
- 🤖 AI Analyzed: May 8, 2026 at 23:18 (9h 16m after Collected)
The impact of the effective blockade of the Strait of Hormuz, a vital energy transportation route, has spread to production and repair in the Japanese automotive industry. Due to obstructed naphtha imports, a shortage of diluents made from naphtha is increasingly affecting some manufacturers and painting companies, and has begun to impact their operations.
The Yomiuri Shimbun reported today that if the supply instability becomes prolonged, it could have a significant impact on the entire industry. Diluents are essential products for cleaning automotive parts and diluting paints.
The impact of supply instability has already affected community-based repair shops. Ikeuchi, a company headquartered in Tokyo with 31 automotive body and paint shops nationwide, stated that suppliers informed them from mid-March that "diluent supply may become unstable." Ikeuchi also reported that diluent supply has decreased by about 80%, and procurement prices have increased by about 40% to 50%.
This body and paint shop operator had planned to open three new branches in April but decided to postpone the expansion due to the inability to secure sufficient diluents and paints.
In addition, some truck operators have begun to cut production due to insufficient diluents. NIPPON FRUEHAUF COMPANY, a manufacturer and seller of truck bodies headquartered in Kanagawa Prefecture, announced on the 20th of last month a partial production cut due to a shortage of diluents.
Supply disruptions have also driven up raw material prices, with Japan Michelin Tires raising prices for summer tires shipped to Japan by 3% to 5% starting in June.
DENSO, a major Japanese automotive parts manufacturer, expressed concern about the future. DENSO Vice President Yasushi Matsui stated at a financial results briefing at the end of last month, "We still cannot predict the situation several months from now." In its consolidated business forecast for fiscal year 2026, DENSO estimates that uncertainties such as naphtha supply instability and the Middle East situation will reduce operating profit by 45 billion yen.
Naphtha, refined from crude oil, is a plastic raw material used in most automotive parts. In addition to crude oil price increases driving up parts costs, there is also a growing concern in the industry about insufficient inventory.
40% of Japan's naphtha is imported from the Middle East, and the impact of the Middle East situation will affect the entire automotive supply chain. Preliminary trade statistics for March, released by Japan's Ministry of Finance on April 28, showed that imports of naphtha and other volatile oils from the Middle East decreased by 36.9% compared to the same period last year.
At a cabinet meeting on the Middle East situation held on April 30, the Japanese government mentioned chemical products made from naphtha used domestically. Prime Minister Sanae Takaichi then stated that procurement from regions other than the Middle East would be promoted, explaining that the domestic supply of chemical products using naphtha "is expected to continue until the end of the year."
The Japanese government also stated that petrochemical companies are still providing sufficient petrochemical products, but concerns about naphtha supply instability in the industry have not been dispelled. The report indicates that some companies seem to be hoarding, causing distribution bottlenecks and exacerbating the sense of shortage.
Takayuki Honma, Head of Economics at Sumitomo Corporation Global Research (SCGR), a Japanese consulting firm, pointed out, "If companies show excessive hoarding behavior, it will create a supply-demand imbalance, and supply deviations may persist."
The Yomiuri Shimbun reported today that if the supply instability becomes prolonged, it could have a significant impact on the entire industry. Diluents are essential products for cleaning automotive parts and diluting paints.
The impact of supply instability has already affected community-based repair shops. Ikeuchi, a company headquartered in Tokyo with 31 automotive body and paint shops nationwide, stated that suppliers informed them from mid-March that "diluent supply may become unstable." Ikeuchi also reported that diluent supply has decreased by about 80%, and procurement prices have increased by about 40% to 50%.
This body and paint shop operator had planned to open three new branches in April but decided to postpone the expansion due to the inability to secure sufficient diluents and paints.
In addition, some truck operators have begun to cut production due to insufficient diluents. NIPPON FRUEHAUF COMPANY, a manufacturer and seller of truck bodies headquartered in Kanagawa Prefecture, announced on the 20th of last month a partial production cut due to a shortage of diluents.
Supply disruptions have also driven up raw material prices, with Japan Michelin Tires raising prices for summer tires shipped to Japan by 3% to 5% starting in June.
DENSO, a major Japanese automotive parts manufacturer, expressed concern about the future. DENSO Vice President Yasushi Matsui stated at a financial results briefing at the end of last month, "We still cannot predict the situation several months from now." In its consolidated business forecast for fiscal year 2026, DENSO estimates that uncertainties such as naphtha supply instability and the Middle East situation will reduce operating profit by 45 billion yen.
Naphtha, refined from crude oil, is a plastic raw material used in most automotive parts. In addition to crude oil price increases driving up parts costs, there is also a growing concern in the industry about insufficient inventory.
40% of Japan's naphtha is imported from the Middle East, and the impact of the Middle East situation will affect the entire automotive supply chain. Preliminary trade statistics for March, released by Japan's Ministry of Finance on April 28, showed that imports of naphtha and other volatile oils from the Middle East decreased by 36.9% compared to the same period last year.
At a cabinet meeting on the Middle East situation held on April 30, the Japanese government mentioned chemical products made from naphtha used domestically. Prime Minister Sanae Takaichi then stated that procurement from regions other than the Middle East would be promoted, explaining that the domestic supply of chemical products using naphtha "is expected to continue until the end of the year."
The Japanese government also stated that petrochemical companies are still providing sufficient petrochemical products, but concerns about naphtha supply instability in the industry have not been dispelled. The report indicates that some companies seem to be hoarding, causing distribution bottlenecks and exacerbating the sense of shortage.
Takayuki Honma, Head of Economics at Sumitomo Corporation Global Research (SCGR), a Japanese consulting firm, pointed out, "If companies show excessive hoarding behavior, it will create a supply-demand imbalance, and supply deviations may persist."